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FAM LEASE AGREEMENTS US Department of State

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					              U.S. Department of State Foreign Affairs Manual Volume 15
                           Overseas Buildings Operations




                       15 FAM 340
                    LEASE AGREEMENTS
                          (CT:OBO-29; 03-29-2012)
                            (Office of Origin: OBO)


15 FAM 341 DRAFTING A LEASE
(CT:OBO-29;    03-29-2012)
All posts must use the model lease in 15 FAM Exhibit 341(2) and follow the
instructions given in 15 FAM Exhibit 341(1).


15 FAM 342 LEASE AMENDMENTS
(CT:OBO-29;    03-29-2012)
Approvals for lease amendments are handled in the same manner as
approvals for the original leases; 15 FAM Exhibit 342 provides a sample
lease amendment.


15 FAM 343 RENEGOTIATION
(CT:OBO-29;    03-29-2012)
a. Renegotiation of a lease requires the execution of a new lease document.
   U.S. Government contracting principles prohibit the renegotiation of a
   valid lease unless mandated by local law or unless additional benefit
   accrues to the U.S. Government. One example of such benefit is
   additional or improved space.
b. Renegotiated leases are assigned new lease contract numbers but carry
   the same property identification numbers. The new lease must identify
   the former lease by number, and must state that it is replacing or
   superseding that lease.


15 FAM 344 NOTICE OF TERMINATION
(CT:OBO-29;    03-29-2012)
Termination of long-term leases (LTL) and short-term leases (STL) for
functional properties requires the prior approval of the Bureau of Overseas
Buildings Operations (OBO) or, for USAID leases, the Overseas Management


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Division, Office of Management Services, Bureau for Management,
USAID/Washington (USAID/W - M/MS/OMD) and funding agency approval.
All lease termination agreements must follow the sample in 15 FAM Exhibit
344.


15 FAM 345 LOCAL RENT CONTROLS
(CT:OBO-29;     03-29-2012)
It is U.S. Government policy to invoke the protection of local rent control
laws, since to do otherwise would raise the question of expending public
funds in excess of the amount required. If local laws require paying rent
increases, the post must investigate and retain copies of the appropriate
laws or pertinent extracts and an original or certified copy of any pertinent
ruling of a local rent control board or authority.


15 FAM 346 LOCAL REGISTRATION OF
LEASES
(CT:OBO-29;     03-29-2012)
In many countries, lease terms are not enforceable by law unless the lease
has been officially registered. The failure to register a lease can lead to the
loss of valuable contract rights and/or potential embarrassment to the U.S.
Government. Despite the fact that the model lease requires the landlord to
register the lease, some landlords fail to do so. In those cases, a post must
take it upon itself to register all leases unless the local jurisdiction does not
provide a registration system or the system does not result in added
protection to the rights of the U.S. Government. Registration is of utmost
importance if the lease contains an option to purchase or a renewal option
extending several years into the future. The lessor normally pays the
registration fees; however, if this is not feasible, these costs should be split
or, as a last resort, should be charged to the lease fund.


15 FAM 347 THROUGH 349 UNASSIGNED




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                           Overseas Buildings Operations




             15 FAM EXHIBIT 341(1)
         MODEL LEASE EXPLANATIONS AND
                 INSTRUCTIONS
                          (CT:OBO-29; 03-29-2012)
                            (Uniform State/USAID)
Posts must read through the model lease in its entirety and all the
instructions before drafting and negotiating any lease.
I. INTRODUCTION TO PROPERTY LEASING
The process of renting space can be long and involved. Once a post has
analyzed the mission’s needs and found an appropriate property that meets
those needs, the post must conduct due diligence before it begins
negotiating a lease. Please see below for a checklist of due diligence steps.
Once the due diligence is complete, the results are satisfactory, negotiations
with the landlord are done, and all necessary approvals have been received,
the post may sign the lease.
A post’s aim in negotiation is to ensure that the final lease reflects or
improves upon the model lease’s terms. The article by article explanations
and instructions below provide guidance to help posts understand and
negotiate the model lease’s terms. In some cases, the instructions will
provide alternate language for a particular term if a landlord will not accept
the standard version. The instructions also indicate which terms absolutely
cannot be changed, which terms may be changed with permission from the
State Department Bureau of Overseas Buildings Operations (OBO) or the
USAID Management Bureau (M), and which terms are more flexible.
Please note that these explanations and instructions are most applicable for
residential property leasing, but are also relevant for leasing functional
properties. Functional properties, however, require special approvals. (See
15 FAM 312.2, 15 FAM 312.6, and 15 FAM 320.)
Please also note that the explanations and instructions often suggest that
posts inform or request approvals from OBO and the Office of the Assistant
Legal Adviser for Buildings and Acquisitions (L/BA) at the Department of
State. In most cases, USAID missions should substitute the USAID
counterparts to these offices, the M Bureau and General Counsel’s Office
(GC), respectively, for these references.
II. OVERVIEW OF THE MODEL LEASE
The Model Lease is designed to be flexible. While it may sometimes appear
that legal jargon has been substituted for straightforward sentences, there is
a legal purpose for each phrase as drafted. Posts must not edit the


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document or add or subtract clauses outside of the guidelines of the
explanations and instructions without prior OBO approval.
If a post has never before used a version of the model lease, has never had
the model lease reviewed by local counsel, becomes aware of changes to
local landlord-tenant law or is informed by a landlord of a conflict between
the model lease and local law, post should follow the procedures set forth in
15 FAM 426 for retaining local legal counsel. In such cases, local legal
counsel should review the model lease for sufficiency and enforceability
under local law and to confirm that it does not conflict with local law.
Additionally, if a particular lease deviates substantially from the model lease
following negotiations with a landlord, the post should consult with OBO and
L/BA regarding whether it is appropriate to retain local legal counsel to
ensure that the lease is acceptable and enforceable under local law.
If local counsel is retained, the post should provide OBO and L/BA with a
copy of any legal opinions that local counsel issues and/or guidance or
comments that local counsel makes. Please send such materials to the OBO
realty specialist handling your post in the Office of Building Acquisitions and
Sales, in the Directorate of Planning and Real Estate (OBO/PRE/BAS) and to
L/BA.
During lease negotiations, a post should not change or delete the negotiable
clauses in the model lease just because a landlord objects or asks to have
them changed or removed. The process of negotiation involves exchanging
benefits and making sure the U.S. Government gains something in return for
rights and benefits given up. At the end of the negotiation, the resulting
lease should be at least as protective of the tenant, if not more protective,
as the model lease. Post negotiators should maintain a firm position on
language that favors and protects the U.S. Government and only modify that
language in exchange for something valuable on other issues. If a post has
any questions as to the propriety of any changes requested by a landlord
during lease negotiations, post should consult with OBO and L/BA.
Once all terms of a particular lease have been agreed on by a post, a
landlord and (if applicable) local counsel, the post must send the lease to
OBO for approval. Once approval is received, the post must affix fiscal data
to the lease and ensure that both parties sign the final page and initial all
other pages of the lease and its annexes.
III. DUE DILIGENCE CHECKLIST
   1.    Confirm the identity of the landlord. Art 1―Ask for
         documentation. If the landlord is a company, make sure it is
         registered and operating legally. Local counsel can usually do this
         easily.
            In some instances, the Corporate Board of Directors is required
             to formally authorize real property transactions. This should also


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         be explored by local counsel.
2.   Confirm the legal ownership of the property. Art 2―In some
     countries this can be accomplished by having post staff check a
     central registry. In other countries, confirmation of ownership will
     require action by local counsel. A post should seek local legal
     guidance if it is unsure how to confirm ownership of a particular
     property.
        If ownership is unclear or in dispute, look for other property. It
         is not recommended that a post spend much time on properties
         with title issues since they often take months or years to settle,
         and owners are usually highly over-optimistic on the prospects
         for quick resolutions.
3.   Conduct a property inspection. Art 2―Prior to signing any lease
     a thorough inspection must be done. The inspection must clearly
     document what systems are in the building and the condition of the
     entire property. The inspection can be conducted by qualified staff
     at the post, or by a professional hired for the job. Both the landlord
     and tenant should sign the inspection document when it is received
     and it should be annexed to any lease agreement.
        For newly built housing where an inspection cannot be done
         before signing some kind of agreement, a post may sign an
         option to lease to secure the right to lease the units in the
         future; in these cases, however, an inspection is still required
         before ―settlement‖ —i.e., before the U.S. Government actually
         commits to leasing the property. Typically, a post conducts an
         inspection through its local contractor and then ―accepts‖ the
         property. However, if the construction is found to be
         unsatisfactory, the post should reject the property and refuse to
         sign the lease.
4.   Obtain Post Occupational Safety and Health Officer and post
     Regional Security Officer approvals. OBO and FAM
     requirements specify that post occupational safety and health
     officers and post regional security officers need to inspect the
     property, approve it for occupancy, and approve any relevant lease
     terms before the lease is signed. They will ensure that the
     premises and equipment comply, to the extent possible, with the
     FAM safety and security regulations.
5.   Obtain Inter-Agency Housing Board approval. Under FAM
     requirements, the Housing Board is charged with ensuring that all
     housing is appropriately assigned and it should, therefore, be aware
     of and involved in any new residential leases.
6.   Create a full inventory with condition reports. Art 2―The


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         inventory must include all plumbing, mechanical, and electrical
         equipment, furniture, furnishings, or fixtures on the premises that
         are included in the leased property (or in any common areas for
         rentals with more than one tenant) and covered by the rent. The
         inventory must also include indications of each item’s current state
         of repair. Ideally, both parties should have a representative
         present during the actual inventory-taking. Both parties must sign
         the inventory report and it should be annexed to the lease
         agreement.
            Inventory-taking can be done during lease negotiations. It is
             best completed immediately prior to the signing of the lease and
             the tenant taking possession of the property.
   7.    Visually document the condition of the premises. Art 2―This
         should be done concurrently with the inventory-taking. Photograph
         or take video footage of the entire leased premises. Again, ideally,
         the landlord will accompany the tenant during this process and
         should even appear in the pictures. Both parties should sign a
         document agreeing that the photos or video footage were taken at
         the time the lease was entered into. The value of these photos
         cannot be overstated when, years in the future, none of the original
         occupants is at the post and there is a dispute with the landlord
         about the original condition of the property.
IV. MODEL LEASE ARTICLE BY ARTICLE EXPLANATIONS AND
INSTRUCTIONS
ARTICLE ONE: PARTIES. The full name and address of the landlord is
recorded in the first article of the lease. Due diligence inquiries into the
landlord’s identity are essential. For the tenant, the lease is always
executed in the name of ―The United States of America, acting by (name),
(title), and (post),‖ regardless of which agency will use the premises. The
reference in a former model lease to ―The Secretary of State‖ has been
deliberately omitted due to difficulties experienced in litigation.
If the lease is executed by a third party acting on behalf of the landlord,
additional inquiries into identity are necessary. Two authenticated copies of
the power of attorney or other evidence of authority to act on behalf of the
landlord must be furnished with the lease.
Do not delete the phrase ―for itself, its heirs, executors, administrators,
successors and assigns.‖ Without this language the lease might end when
the landlord dies or when the leasing company ceases to do business. Posts
might also be able to use this phrase to argue for the continuation of the
lease when a property that was expropriated by the foreign government is
returned to its private sector owner.
ARTICLE TWO: DESCRIPTION OF PREMISES. It is important that the


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leased premises be described fully and completely.
   A1.   Legal Description: Provide the street address, building name,
         apartment number, plot number and other information from the
         title deed. For multiple unit leases, state the data for each unit.
   A2.   Physical Description: State the number and types of rooms, floor
         and unit number if within a multi-unit building, gross floor area,
         servants’ quarters, and garage/parking space. Include a
         description of all common areas, if this is a shared building, and of
         the land areas associated with the building(s).
   A3.   Size of Leased Premises: State, in square meters or feet, the
         rentable area as agreed with the landlord, as well as the gross and
         net areas as per the guidelines set forth in 15 FAM 238, Exhibits A,
         B, and C. For multi-tenant buildings where operating expenses are
         calculated based on occupancy percentage in comparison to the
         total rentable building area, that percentage must be noted as well.
         Attach a floor plan of the leased premises, with dimensions, to the
         lease.
   A4.   Additional Property: Furnishings and/or equipment provided or
         included with the leased space must be noted here. This includes
         all ―extras‖ that might not ordinarily appear in a standard property
         lease, such as outdoor equipment, spa or furniture that can be
         removed but has been left for our use.
   B.    An inventory and condition report showing the condition of each
         room and/or item in the premises as ―Good,‖ ―Fair,‖ or ―Poor,‖ and
         indicating the nature of defects in each, if any, must be annexed to
         the lease. Furnishings and equipment included in this lease must
         not be removed from the property without a written agreement
         between the landlord and the U.S. Government, and the post must
         never store the landlord’s property off-premises. Wherever
         possible, photographs and video footage documenting conditions
         upon lease commencement should be included in the inventory.
ARTICLE THREE: LEASE TERM. This clause establishes the legal starting
date of the lease. The basic term of the lease commences on that date and
ends on the date agreed upon, unless terminated early. Specific calendar
dates are required. It is not uncommon for leases to start on one date with
the obligation to actually pay rent starting later. This occurs when the
property is just being built or if the landlord agrees to upgrade the property
in advance of delivering vacant occupation.
ARTICLE FOUR: LEASE RENEWAL. Where possible, and in the U.S.
Government’s interest, provision should be made for options to renew the
lease. The options should include definite periods and rental terms. If the
landlord will not agree to the same rent for the renewal term(s), the post


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should replace the text of Article Four in the Model Lease with the following
language:
         The Lease is renewable by the TENANT under these same terms
         and conditions, except for a change in rental rate, for ___ further
         period(s) of ___ years, or until (date).
         The renewal rental rate shall be fair market, to be determined by
         the Parties hereto. The fair market rental shall reflect the present
         value of this and similar rental properties for similar leased duration
         but shall disregard all improvements (if any) which TENANT has
         made to the Premises. Not less than 6 months prior to the expiry
         date of the present rental period, the LANDLORD shall give notice to
         the TENANT in writing of the proposed rental amount for the
         renewal period. Unless the TENANT objects to the proposed rent
         within 90 days of receipt of such notice, any renewal by the
         TENANT will be at the LANDLORD’s proposed rate. The TENANT
         must give notice to the LANDLORD of its intent to renew at least
         ___ days prior to the date the Lease term or any renewal period
         would otherwise expire. If the renewal option is exercised, the
         rental rate change will take effect on the first day of the renewal
         term.
         If fair market has not yet been ascertained when the renewal period
         begins, the TENANT shall continue to pay rent and operating
         expenses at the most recent rate until the new rate has been set,
         at which time the Parties will make retroactive payments to the
         date of commencement of the new Lease, if necessary.
The post should also include the following language if it is fiscally and
practically feasible in the context of the lease’s annual rent, the length of the
period of the lease renewal and the local country conditions:
         If the Parties are unable to agree on fair market rental, there shall
         be a valuation committee of three valuers. Each valuer shall be
         certified by the national Board of Appraisers, the Appraiser General,
         the Land Valuation Department, or similar institution or entities,
         depending upon which services are available locally. One valuer
         shall be appointed by each of the Parties within 10 working days
         after written notice of disagreement on fair market rental is given.
         The two named valuers shall appoint the third valuer. If the
         valuers are unable to agree to a third valuer within a period of 1
         month after the appointment of the second valuer, the third valuer
         shall be appointed by the local entity having authority over
         appraisers.
         The decision of the valuation committee shall be final and binding
         upon formal, written issuance thereof. There shall be no appeal.



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When using this alternate language, if the landlord will not agree to a
committee of valuers to establish fair market rental or if such a committee is
not fiscally or practically feasible, the post can try using one of the following
fall-back positions:
   1.    The new rental rate will be a fixed percentage escalation over the
         current rate; or
   2.    The new rental rate will be an escalated amount based on the U.S.
         Consumer Price Index (CPI).
Posts are cautioned that rental rates that start low and are increased by an
escalating factor at intervals throughout the lease might be more costly to
the U.S. Government than a lease with a fixed, albeit high, rate at its
commencement. Currency exchange fluctuations, market fluctuations, and
deteriorating building conditions will all affect renewal rate. Indexes such as
the Consumer Price Index normally are geared to ―market basket‖ items and
not to real estate. Therefore, thorough economic analysis is sometimes
called for, and posts should negotiate the best renewal terms possible.
All of Article Four should be deleted if the landlord will not agree to a lease
renewal or if the post is certain its need for the leased premises will cease at
the natural termination of the lease.
ARTICLE FIVE: PAYMENT. Payment terms are the heart of the lease and
the area where negotiations can be most useful to the post. Posts are
authorized to pay rent up to 12 months in advance. However, this provides
a windfall advantage to the landlord and should not be offered unless
absolutely necessary. Quarterly payments provide a reasonable financial
incentive to the landlord and help to manage the post’s lease administration
burden.
If a landlord insists on annual payments in advance, then the post should
negotiate to include a provision that the rent be discounted to its present
value. In other words, paying the entire rent in advance is worth more
today than the same rent paid over a year because the landlord can use that
money to earn income on other investments during the year. The typical
discount rate is the interest rate available in-country for deposits in local
banks and financial institutions. For example, if the rent is U.S. $25,000 per
year, and local banks commonly pay 8% interest on deposits, then a
landlord can earn an additional U.S. $2,000 over the year on our rent
payment. This is a windfall that is unnecessary. In this case, the advance
payment for the year would be discounted by 8%. To calculate the adjusted
payment, divide the rental amount by 1 + the interest rate. By this formula
(U.S. $25,000/1.08) the adjusted payment would be approximately U.S.
$23,150. In reality, this is a negotiating point to get landlords away from
annual payments and to get full value for the U.S. Government when large
rents are paid in advance.



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For longer advance payment terms than 1 year, posts must cable OBO for
approval; such approval will only be granted in exceptional circumstances.
Lease contracts may be paid in U.S. dollars or in local currency, at the
Contracting Officer’s discretion. FAR 25.1002, 48 CFR 25.1002. (However,
posts are reminded that they are not permitted to engage in black market
currency transactions.) If payment is to be made in other than U.S. dollars,
insert specific information concerning the fixed amount in local currency. To
the extent possible, the lease contract should contain a provision that
protects the U.S. Government from currency fluctuations by making it clear
that no adjustment in lease payments will be made as a result of
currency revaluations. In some instances, and where legally possible, it
might be preferable to denominate the lease in U.S. dollars, payable in the
equivalent local currency, with a specified method for ascertaining the
applicable exchange rate. It is important to note that dollar or third-country
currency payments are authorized only in those instances where such
payments are permissible under local law (see 15 FAM 324).
Posts are reminded that offshore payments – i.e., where the U.S.
government wires rent into an account based in a country other than in the
country where the leased premises is located or sends a rental check to an
address in such a country are strongly discouraged and require specific prior
approval from OBO and L/BA. In addition, cash payments to offshore
entities are prohibited. (See 92 State 331112.)
Separating rental payments from operating expenses where applicable saves
the U.S. Government money. Rent is market driven and negotiable.
Operating expenses are not – these are actual costs of keeping the
property secure, fully operational, clean, safe, and in good repair. These
costs are precisely quantifiable and are only minimally related to market
forces that typically influence rental rates. Tying them to the market rent
virtually guarantees overpaying on the lease as a whole.
The operating expenses to be included should be spelled out in the lease.
Operating expenses should only be the landlord’s expenses that are
predictable, consistent, and required to keep the property in good physical
condition. Please note, of course, that the operating expense/rent
dichotomy should be removed if all allowable operating expenses will be paid
by the tenant directly to third-party providers.
Common operating expenses are: utility payments made by the landlord for
common area usage; salary and benefits for building staff; and routine
maintenance costs, e.g., painting or repairing stairs in common areas.
Operating expenses can also include the landlord’s property taxes if they are
specific to the property containing the leased premises. Operating expenses
do NOT include: non-routine repair costs; costs incurred in making the
property habitable or ensuring compliance with building or occupancy codes;
wages and salaries of off-site staff, e.g., staff in a central leasing office;


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capital improvements; depreciation of the property’s value; the landlord’s
interest or principal payments on a mortgage; financing or refinancing
expenses; taxes paid by the corporate landlord as a business unrelated to
the leased property; or leasing fees or other brokerage fees. If the landlord
strongly insists upon the inclusion of one of these typically excluded
elements into the operating expenses, consult with OBO.
If payments will be made to any party other than the landlord, or at any
address other than the one listed in Article 1, include such payment
instructions here.
Where the annual lease payments exceed U.S. $25,000 (or the relevant
rental benchmark at posts that participate in the Rental Benchmark
Program), posts must send a waiver request to OBO for review and approval
before signing the lease.
The language contained in Article 5(D) is very important to ensure
compliance with the Anti-Deficiency Act, and may not be substantively
altered without prior approval from OBO and L/BA.
ARTICLE SIX: WARRANTIES. The warranty language included here is
standard language.
Part A ensures that the landlord does in fact have the ability to grant a valid
lease by making it responsible for handling any claims of ownership or
possession by anyone else. For example, if another party claimed to be the
rightful tenant, the landlord would have a contractual obligation to defend
the U.S. Government’s claim of rightful tenancy. This is not a rare
occurrence in countries without established and credible land registration
systems and historical records. Most often, previous owners or their heirs
come forward claiming that they still own the land or some interest in it, and
demand that the U.S. Government pay rent to them. The landlord must
fully insulate the U.S. Government against such claims.
Part B addresses the situation where the landlord fails to provide that
defense. We cannot allow such claims to go completely unanswered if a
landlord fails to do so, as this could result in court judgments against the
U.S. Government, misinformed host government officials, and inaccurate
publicity about our possession of the property. Thus the U.S. Government
will handle the defense at the landlord’s expense if the landlord has not
properly responded to the claim. Any legal action taken in defense of such
claims, however, needs to be approved in advance by L/BA and the
Department of Justice’s Office of Foreign Litigation.
Part C is for the landlord’s protection. It ensures the U.S. Government
cannot attempt to get out of lease provisions by claiming that the lease was
signed by an unauthorized individual.
ARTICLE SEVEN: LANDLORD RIGHTS AND RESPONSIBILITIES.



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A. Right of Entry. This article is self explanatory. Access to the property is
   a typical right of landlords, but in our case we must limit it to exclude
   landlords from areas deemed sensitive with regard to security or
   communications.
B. Landlord-provided Services. Insert a full description of the services to be
   provided by the landlord, which may include heat, light, sanitary water,
   drinking water, power, sewage disposal, toilet facilities, air conditioning,
   elevator service, telephone service, etc. The itemization of the landlord’s
   maintenance responsibilities are not to be viewed as services for which
   additional costs are to be assessed, occasioning a larger rental amount.
   Rather, they are services that the tenant deserves from the landlord at no
   additional cost beyond the rent and operating expense figures stated in
   Article Five. These services define the value received for the rent paid.
In a multi-tenanted building, the post may wish to require the landlord to
provide periodic window washing, upkeep for common areas, care of the
grounds, etc. Separate utility meters for each tenant’s space is essential to
avoid disputes about individual responsibility for the utilities. The lease
should also assign responsibility for condominium fees and services, if any.
Every effort must be made to include provisions that place the responsibility
for initial make-ready improvements, renovations, alterations, repairs, and
security upgrades consistent with the Department’s A-32 standards (local
guard program and residential security) with the landlord and at the
landlord’s expense. Particularly for residential properties, such preparations
are considered a business expense, funded through normal rental payments,
and should be maintained as landlord responsibilities. If the landlord is
unwilling to undertake such repairs and improvements, negotiations should
focus on reducing overall rental costs as an offset to the tenant undertaking
the necessary improvements or on securing a period of time rent free while
the upgrades are installed at U.S. Government expense. Such
improvements are governed by regulations outlined in 15 FAM 313.1. If
posts have difficulty negotiating such a provision, they should seek guidance
from OBO.
C. Maintenance Responsibilities. Tenant’s maintenance responsibilities
   should be limited to periodic cleaning of the premises, removing the
   trash, replacing light bulbs, and other minor maintenance and repairs
   necessary to meet tenant’s obligation to maintain the premises in good
   repair and tenantable condition in accordance with Article Eight. In no
   case may the tenant accept responsibility for major structural repair and
   maintenance; this must be specified as the responsibility of the landlord.
If the building is shared with other tenants, add the following language (with
amendments as necessary to reflect the contents of the particular leased
premises):



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      Unless hereinafter specified to the contrary, the LANDLORD shall
      maintain the said Premises, including any public halls, entrances to
      buildings, other common areas, elevators, fire systems and central
      electrical and mechanical systems, stairways, and public toilets, in
      good repair and tenantable condition.
If there are sidewalks or parking areas on or adjacent to the property, add
the following language:
      The LANDLORD undertakes to maintain the sidewalks and parking
      areas before the entire building in proper and safe condition, and to
      accept all responsibility for them, including but not limited to the
      removal of ice and snow, sand accumulation, storm debris, etc.
D. Responsibility for Damages. This clause is critical and must not be
   reduced in scope or application. It maintains the landlord's responsibility
   for any damage to people or property that is caused by a failure to
   maintain or repair basic building systems and common areas, thereby
   providing some incentive to keep the building safe and operational. In a
   building shared with other tenants, this is absolutely critical for the U.S.
   Government because we are not in control of common areas nor can we
   invest in maintaining the landlord's property. This clause also
   acknowledges that the landlord has no responsibility for supply and
   delivery of utilities provided by utility companies outside of his control.
E. Emergency Repairs. If emergency conditions such as earthquakes,
   widespread floods, or volcanic eruptions make it unlikely that the landlord
   will be able to focus on making urgent repairs, then the post should not
   exert much effort trying to activate the landlord. The post’s priority
   should be to react to any emergency and repair damage to the extent
   possible for temporary safety and security until conditions calm down.
   However, in many cases, the emergency is localized, e.g., burst
   internal water pipes, collapsed roof, or storm damage to our specific
   building. Notice to the landlord is always important, if feasible, for
   potential assistance and to establish a record for settling damages later
   on, and should definitely be pursued in these situations.
   In severe scenarios, the Department may not be able to provide
   logistical support for days or weeks. The post must rely on self-help
   measures whenever appropriate to protect people and property, which
   may include abandoning a property temporarily. Each case must be
   decided on its own merits, but posts must do whatever is feasible and
   reasonable to mitigate damages and losses for the U.S. Government
   first.
F. Taxes, Fees, and Assessments. Taxes, assessments and other charges of
   a public nature must be borne by the landlord. If prevailing
   circumstances require that the tenant pay these charges directly or


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   reimburse the landlord separately, the post must consult with OBO
   beforehand and in no event may these costs exceed the landlord’s actual
   costs.
G. Registration. Registration is highly recommended in countries where a
   registration system exists and has meaning. Registered leases protect
   the U.S. Government’s legal rights under the lease in most cases, but for
   short-term leases of 2 years or less, the cost and effort to register may
   exceed the value of registration, and may be waived where appropriate.
H. Claims. In some ways this clause duplicates some of part D, and is just
   as important if not more so. Part H reiterates that landlords are
   responsible for damage to personal property (landlord, U.S. Government,
   or third party property) and for personal injuries suffered because of their
   failure to maintain or their provision of improper maintenance with
   respect to the property. It goes further, however, and specifies that the
   landlord, and not the U.S. Government, is the proper legal defendant in a
   lawsuit brought by a plaintiff who wants to sue because of such property
   damage or personal injury. While it cannot prevent lawsuits from being
   filed against the U.S. Government, it provides potential legal protection to
   the U.S. Government by affording us the right to bring in the landlord as
   the proper defendant. This clause also imposes responsibility on the
   landlord for the acts and omissions of its own employees, contractors,
   agents, and others under its control or direction.
This clause highlights the importance of liability insurance, and is the reason
we require landlords to carry such insurance and why posts should inspect
those policies every year.
ARTICLE EIGHT: TENANT RIGHTS AND RESPONSIBILITIES. All leases
should provide that the tenant has the right to make minor alterations,
attach fixtures, etc.
If the landlord is determined to resist this provision, the lease terms could
require prior written permission of the landlord before any such undertaking;
ideally, if landlord permission is required, the lease should provide that such
permission cannot be ―unreasonably withheld.‖ If such permission is
required, the post must comply with the lease and obtain written permission
before making alterations.
Alternatively, the following language can be added if part of the landlord’s
resistance is due to a concern for other tenants:
         The TENANT’s alterations, additions, structures, or signs will be
         placed such that they are not detrimental to or inconsistent with the
         rights granted to other tenants.
For residential leases, posts should not raise the issue of restoration
responsibilities with the landlord. If the landlord requires it however, the
post may, with prior OBO approval, use the following language:


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         The TENANT, if required by the LANDLORD, shall restore the
         Premises to the same condition as that existing at the time of
         entering upon the Premises under this Lease, except for reasonable
         and ordinary wear and tear, damage by the elements, or other
         circumstances not under the TENANT’s control. However, if the
         LANDLORD requires such restoration, the LANDLORD shall give
         written notice thereof to the TENANT at least 90 days before the
         termination of the Lease.
Even if this clause is used, before making any alterations (including security
upgrades) to the property, the post should request from the landlord a
waiver from the restoration requirement.
When leasing functional properties to which the U.S. Government will be
making significant alterations, renovations, or improvements, post should
consider addressing the issue of restoration responsibilities in negotiations
with the landlord. In some countries, the U.S. Government may be
responsible for the cost of removing any such constructions at the end of the
lease, unless the lease provides otherwise. Post should therefore attempt to
explicitly exclude or limit the U.S. Government’s responsibility for restoring
the leased premises to their original condition. Post must consult with OBO
and L/BA prior to initiating discussions with the landlord regarding
restoration responsibilities.
At the termination of any lease that includes a restoration clause, the
landlord and tenant will rely on the condition report prepared at the time the
premises were leased and on the photographic file that the post has
developed to document the building’s condition. The importance of the
post’s documentation cannot be overstated.
The parties should negotiate the estimated cost of restoration. The tenant
may agree to perform the required services, pay a contractor or the landlord
to perform them, or pay the landlord a one-time fee to cover the restoration
costs. The tenant may also sell excess U.S. Government property to the
landlord that would be difficult to remove from the premises, using the
purchase price as an offset to the costs of restoration. Post property control
offices, leasing offices, and certifying offices must ensure that these types of
transactions are fully justified and documented due to the obvious high risk
of waste, loss, and abuse which can occur in such settlements. Posts should
develop clear internal control procedures to prevent property and financial
losses, and the appearance of misappropriation.
If, during lease negotiations, a landlord demands additional tenant
responsibilities or liabilities be included in the Lease, the post must consider
whether such responsibilities will result in additional costs to the U.S.
Government or (more usually) in the risk of such costs. It is vital to
remember that under no circumstances can the U.S. Government
agree to provide an unlimited indemnity to the landlord – i.e., to


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“indemnify” or “hold harmless” the landlord against the undefined
future losses or damages – with respect to risks associated with our
tenancy. This has become a common request in light of attacks and
perceived threats against the United States around the world. Be advised
that this issue is a deal-breaker. The U.S. Government will not give anyone
an unlimited indemnity against losses as this violates the Anti-Deficiency Act
by exposing the U.S. Government to unknown and unlimited financial
liability that cannot be appropriated for in advance.
If a landlord requests language that appears to impose additional liability on
the U.S. Government or a post has any question as to whether landlord-
requested language is legally acceptable, it must consult with OBO and L/BA.
ARTICLE NINE: ASSIGNMENT AND SUBLEASE.
A. The U.S. Government, as tenant, prefers to be able to make an
   assignment of the lease to a third party rather than enter into a sublease
   with such party, because an assignment allows the U.S. Government to
   minimize its contractual involvement with the landlord. Under an
   assignment, the U.S. Government, as tenant, has far less liability to the
   landlord because more of its obligations are assumed by the new tenant.
   Under a sublease, the U.S. Government still has a full and primary
   contractual relationship with the landlord, even if the entire premises
   have been sublet. When subleasing, posts must attempt to recover
   maintenance costs to the extent possible under the circumstances. The
   U.S. Government in turn becomes a landlord, and this is not
   recommended by OBO.
   Posts should be aware that it may be difficult to get a landlord to agree to
   an absolute and unrestricted right to assign or sublease. Accordingly, if a
   landlord refuses to include such a provision, the post should then attempt
   to negotiate both:
   1.    The right to assign or sublease at any time with the landlord’s
         consent, which consent shall not be unreasonably withheld; and
   2.    The right to assign or sublease at any time without consent where
         the tenant, in its sole discretion, determines that, for essential
         security or foreign policy reasons, it can no longer occupy the
         premises.
   In sum, an absolute right to assign or sublet is preferable. The right to
   assign or sublet with approval, in conjunction with the absolute right to
   assign or sublet without approval where U.S. Government security or
   foreign policy concerns make it necessary, is acceptable.
B. This paragraph, restricting the landlord’s ability to transfer its interests, is
   intended to give the U.S. Government some protection in the event that
   the building that the post is leasing is transferred to a foreign government
   hostile to U.S. Government interests or to a landlord with a background


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   inimical to U.S. Government interests.
ARTICLE TEN: PURCHASE OPTION. Posts should always ask for ―fee
simple absolute‖ title or its local equivalent. If the title will not be fee simple
absolute, posts must amend the language of the clause and send it to
OBO/PRE/BAS for approval. There is a minimum ―bundle of rights‖ that we
must be able to acquire to consider the purchase to be worthwhile.
The purchase price should be an amount equal to fair market value. Record
that amount in the Article if it is known. Otherwise, the fair market value
may be stated as a multiple of the rental amount (e.g., six times the rental
amount). Posts are advised that an option to buy ―at a mutually agreeable
price to be determined‖ is not the preferred language as the option has
limited value. Although such language may be included, if the landlord
insists in negotiations, it is not to be considered a true option; nor can it
justify any concessions or monetary consideration from the leasing officer.
This Article can be indicated as ―nonapplicable‖ in the event that a landlord
refuses to grant the U.S. Government a purchase option. However, in such
case (or in case a landlord refuses to agree to a specific sale price), it may
be worth negotiating for the U.S. Government to have ―a right of first
refusal‖ with respect to the leased premises; such a right would require the
landlord to offer the property for sale to the U.S. Government at a given
price before he or she or it could sell the premises to a third-party at that
(or a lower) price.
ARTICLE ELEVEN: INSURANCE. If insurance is not available at a post, the
post must negotiate language exempting the tenant from responsibility for
repairing damages resulting from ordinary wear and tear, fire, earthquake,
flood, storm, war, civil disturbance and other conditions beyond the tenant’s
control, including intentional and/or negligent acts of the landlord, landlord’s
agents, servants, or employees.
As described in the instructions for Article Eight, under no circumstances
can the U.S. Government indemnify the landlord, i.e., hold the
landlord harmless, against unlimited future losses or damages. It is
against U.S. Government policy to acquire insurance. The U.S. Government
will only purchase third-party insurance under extraordinary circumstances,
and a post may only agree to do so with prior approval from OBO and L/BA.
If a landlord demands that the post (as tenant) purchase insurance, posts
should explain to the landlord the U.S. Government policy of self-insuring. If
absolutely necessary, a post can agree to include language to the effect that
the landlord shall not be responsible for specific losses and damages that are
the fault of the U.S. Government and that a tenant would normally insure
against the risk of. Before accepting any such language, however, the post
must consult with OBO and L/BA.
ARTICLE TWELVE: DESTRUCTION OF PREMISES. This Article gives the



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U.S. Government the right to immediately – i.e., with no notice – terminate
the Lease (in whole or in part) in the event that the leased premises is
rendered uninhabitable. It also requires the landlord to refund the money in
such event.
This Article is usually accepted by landlords without alteration, though
occasionally they ask for the right to terminate in the event that the
premises in rendered uninhabitable or resist the U.S. Government’s right to
terminate ―in part.‖ In theory, either or both of these requests may be
acceptable to the U.S. Government depending on the particular
circumstances; however, post should consult with OBO to ensure that the
proposed wording adequately protects the U.S. Government’s interests.
ARTICLE THIRTEEN: LANDLORD’S DEFAULT. Note that this is not
fashioned as a bilateral right for the parties; rather it is intended as the right
of the tenant to elect between terminating the lease and making itself whole
and deducting the costs of such remedy from the rent in the event of a
landlord default. It is worth noting that this Article’s escape clause is not
limited to a landlord’s failure to repair. It can be used if the landlord fails to
fulfill any lease obligation, such as the obligation to obtain insurance.
It is essential that before using either of its rights under this Article, a post
must have clearly documented the lease violations to the landlord in writing
and given the landlord a chance to cure such violations within a reasonable
deadline. The definition of ―reasonable‖ will depend on the circumstances
and may be quite short in certain cases. If a post then determines that
either termination of the lease or remedy of the outstanding default is in the
best interests of the U.S. Government, it must notify OBO/PRE/BAS and
L/BA of the circumstances surrounding its wish to do so. Once approval is
given, the post may then terminate the lease or remedy the default without
prior notice to the landlord.
ARTICLES FOURTEEN: TERMINATION.
A. In negotiating for termination rights, posts must try to obtain the best
possible terms for the U.S. Government. If possible, the lease should
provide for termination or cancellation of the lease ‖for the convenience‖ of
the tenant. In particular, leases executed within the framework of the
delegation of authority contained in 15 FAM 312.7, and whose basic term
exceeds 1 year, should include the tenant’s unilateral right to terminate the
lease pursuant to written notice to the landlord required no more than 90
days in advance.
If a post is unable to negotiate a unilateral right to terminate for
convenience, it must notify OBO of the circumstances surrounding the
negotiation of this clause immediately. OBO will work with the post to
fashion an acceptable alternative based on the landlord’s objections to the
clause, e.g., increasing the period of notice, particularly in the case of a



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long-term lease. . Another though less desirable alternative would be for
the post (with OBO’s advanced consent)to use the following termination
clause:
         If the TENANT decides to remove its diplomatic establishment from
         [city], or to change the grade thereof, or acquires its own property
         in [city], or to substantially reduce its personnel from the present
         level, or if the employee assigned to the leased premises is
         transferred, the TENANT shall be at liberty to terminate this Lease
         upon giving the LANDLORD 90 days’ written notice. The LANDLORD
         is entitled to receive rental payments through the termination date
         when the TENANT shall surrender the Premises, but has no right to
         any other payment related to the termination.
Please be sure to note that this termination for convenience provision is not
a reciprocal provision. If OBO were to agree that the landlord has this same
right of termination, then any lease containing such right would essentially
be enforceable only for the length of the notice period.
If a landlord requests an explicit right to terminate, a post may only agree to
language giving the landlord such right in the event that the tenant commits
a material breach of the lease, is given notice and has a reasonable
opportunity to correct such breach. Posts should consult with OBO before
accepting any such language.
B. The rebate clause, requiring a pro rata refund for rent payments made for
periods after the premises are surrendered, should be included in all leases
and is required for leases where the rent is paid more than 3 months in
advance.
For functional space where large advance payments are required, effort
must be made to obtain a bank guarantee, surety bond, or the first lien on
realty to assure a pro rata rebate in case the lease is terminated before its
rent is earned. If a guarantee cannot be obtained, the reasons for its
absence must be explained and retained in the post’s lease files.
ARTICLE FIFTEEN: DISPUTES RESOLUTION.
A. Often times a landlord will insist, or local law will require, that a local
language version of the lease be executed. This is acceptable; however,
post should always insist that an English language version of the lease also
be executed. This lease provision ensures that, in the event that a non-
English language version of the lease is signed, the English language version
will prevail in the event of a conflict between the two. If local law requires
(or a landlord demands) that the non-English version of the lease prevail in
the event of conflict (or that the English and non-English versions be given
equal weight), post must obtain a certified translation of the non-English
version of the lease before executing the lease.



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B. The Contract Disputes Act (CDA), set out in relevant part in Article
Fifteen, must, by law, be included in all U.S. Government leases, unless the
other party is a foreign government, governmental agency or international
organization, or the post receives a special waiver from the OBO Director.
Thus, Posts must do their very best to negotiate the CDA language
into all leases.
If a post has difficulty including this clause, it must notify OBO/PRE/BAS
immediately of the full circumstances involved in negotiating this particular
clause. It is possible for the OBO Director to waive this clause where
necessary, but such waiver should only be requested after post has
presented the language to the landlord and vigorously argued for its
inclusion in the lease and, even then, only if the totality of circumstances
warrant it. The disputes resolution procedure mandated by the CDA is very
cost-effective when compared to alternatives, so waiver of the clause should
be regarded as a major step not to be undertaken solely because the lease
terms are otherwise advantageous. If leases for suitable alternative
properties are available at reasonable prices with landlords who will accept
the standard CDA clause, then negotiating with those landlords is the
recommended course of action.
If the circumstances do warrant requesting a waiver of the CDA clause, OBO
can assist post in drafting alternative disputes resolution language and
appropriate waiver documentation for evaluation and signature by the OBO
Director.
In the event that this clause is not acceptable under local law, a post must
obtain a full legal opinion from local legal counsel and submit that to OBO
and L/BA along with the request for a blanket waiver from use of this clause.
If such a blanket waiver is granted, with the approval of the OBO Director,
then the post will not have to apply for CDA waivers for individual properties
going forward.
If the clause does not apply (as in the case of a contract with a foreign
government) or if it has been waived, for an essential property, L/BA
recommends the inclusion of the following language in place of the model
Article 15(B):
Any disputes arising between the Parties hereto concerning this Lease that
cannot be resolved in negotiations between the LANDLORD and TENANT
shall be referred to a court of competent jurisdiction.
Other alternatives such as referring disputes to an arbitral body or deleting
the disputes resolution clause in its entirety may be acceptable in certain
circumstances. However, posts should consult with OBO and L/BA before
suggesting any particular nonstandard formulation as there are substantial
costs associated with arbitration and the lack of a specified disputes
resolution mechanism can cause confusion in lease administration.



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Under NO circumstances may a lease include language that submits the
United States to the jurisdiction of a particular foreign court. Indeed, the
Department of State has no authority to submit the U.S. Government to the
jurisdiction of a particular local court as such submission is tantamount to
waiving the U.S. Government’s sovereign immunity. Posts should make
potential landlords aware that the inclusion of such language (e.g., ―All
disputes hereunder will be resolved by the courts of Country X‖) is an
absolute deal-breaker.
ARTICLE SIXTEEN: CHOICE OF LAW. The purpose of this clause is to
state which substantive law will be used in construing the terms of the lease.
Keep in mind that agreeing to have local law govern the interpretation of the
terms of the lease is NOT the same as submitting to the jurisdiction of the
local courts in case of a dispute (see instructions to Article 15).
While the law governing the terms of the lease is typically the law of the
country and local area in which the property is located (the ―situs‖ of the
property), there may be valid reasons for selecting the law of an alternative
country, or for leaving the Article out entirely. Before deleting or replacing
the model lease provision, posts must consult with OBO and L/BA.
ARTICLE SEVENTEEN: SCOPE OF AGREEMENT AND LEGAL
CONSTRUCTION. These provisions are important to the legal interpretation
of the lease and must not be modified without approval from L/BA.
ARTICLE EIGHTEEN: NOTICES. If there are registered, certified mail, or
return receipt requested procedures available at a post, the post should
specify the type of mail service required. If there is no adequate mail
service, posts must specify hand delivery.
Article 18(B) is legally required. A post cannot agree to receive legal service
of process other than through the Ministry of Foreign Affairs in accordance
with customary international law. For any legal service of process received
by a post, the post must immediately notify the Office of the Assistant Legal
Adviser for Diplomatic Law and Litigation (L/DL) of the circumstances
involved that occasioned the notice so that L/DL can instruct posts on
appropriate procedures to be followed.
ARTICLE NINETEEN: CERTIFICATION AND DISCLOSURE REGARDING
PAYMENTS TO INFLUENCE CERTAIN FEDERAL TRANSACTIONS. Recent
legislation requires that this ―anti-lobbying‖ article be included in all real
estate contracts (other than deeds) whose value exceeds U.S. $100,000.
For leases, post should look to the annual payments, including rent,
operating expenses, and all other costs, to determine whether the U.S.
$100,000 threshold has been met. Thus, if the annual payment is greater
than U.S. $100,000, this clause must be included. The article may be
deleted for contracts with a value less than U.S. $100,000.
If a post encounters resistance to the inclusion of this clause, it must notify


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the OBO/PRE/BAS immediately of the full circumstances, and OBO will
provide further explanation for the post to pass on to the prospective
landlord. In certain unusual circumstances, the OBO Director may be able to
waive the inclusion of this clause; a post should consult L/BA about this
possibility only if there are absolutely no alternatives and the property is
essential.
SIGNATURES: If local law and custom so suggest, the post may wish to
have two witnesses sign the lease document. Witness signatures are not
required.




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                  15 FAM EXHIBIT 341(2)
                  MODEL STANDARD LEASE
                          (CT:OBO-29;        03-29-2012)
Posts must read through the model standard lease in its entirety and all the
instructions before drafting and negotiating any lease.


MODEL STANDARD LEASE
  Lease No.: ________________
  Fiscal Data: ________________
                               LEASE AGREEMENT
                                     between
                 ___________________________________
                                       and
                     THE UNITED STATES OF AMERICA
ARTICLE ONE: PARTIES
This lease (hereinafter the ―Lease‖) is entered into this _____ day of
________________, 20__, by [name and address of Lessor], for
himself/herself/itself, his/her/its heirs, executors, administrators, successors
and assigns, hereinafter referred to as ―the LANDLORD,‖ and the United
States of America, acting by ________________of the Embassy/Consulate
General/Consulate/USAID Mission of the United States of America at
________________, hereinafter referred to as ―the TENANT‖ and, together
with the LANDLORD, as ―the Parties.‖
ARTICLE TWO: DESCRIPTION OF PREMISES
A. The LANDLORD hereby leases to the TENANT the following described
Premises and their appurtenances (hereinafter the ―Premises‖) to be used as
a United States diplomatic establishment and for such other purposes as the
TENANT may desire:
1. Legal Description: [Official title/deed description]
2. Physical Description: [Actual structures]
3. Size of leased Premises: [in square meters or feet - rentable area as
   agreed with the LANDLORD, gross area as per FAM, and net area as per
   FAM, as well as percentage of total rentable building area if relevant]
4. Additional Property: [Nonstructural property, e.g., generators or water
   tanks]


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B. A floor plan of the leased Premises with dimensions, as well as
inventories and condition reports of the Premises, including any mechanical
or electrical equipment, furniture, and furnishings provided by the
LANDLORD, as they now exist, signed by both Parties, are attached to and
made part of this Lease.
ARTICLE THREE: LEASE TERM
The term of this Lease shall be for ____ months/years, beginning
____________, 20__, and ending ________________, 20__.
ARTICLE FOUR: LEASE RENEWAL
The Lease is renewable by the TENANT under these same terms and
conditions for ___ further period[s] of ___ years, or until [date]. Written
notice of the TENANT’s intent to renew must be given to the LANDLORD at
least ___ days prior to the date the Lease term or any renewal period would
otherwise expire.
ARTICLE FIVE: PAYMENT
The TENANT shall pay the LANDLORD for the Premises rented, the operating
expenses thereof, and for other services or improvements as follows:
A. The basic annual rent for the leased Premises is _____. It will be paid in
annual/monthly/quarterly/semi-annual installments of ____ [choose
currency].
B. The initial estimate for annual operating expenses for the leased
Premises is ____, and will cover the following services: [see instructions for
allowable operating expenses]. It will be paid monthly in equal amounts. In
January of each calendar year, the LANDLORD will submit operating expense
receipts to an independent accounting firm for auditing, to be completed
before the end of February. If the audit reveals that the LANDLORD
justifiably paid more in operating expenses than the TENANT remitted during
the year, the TENANT will pay the difference. If the audit reveals that the
LANDLORD paid less in legitimate operating expenses than it collected from
the TENANT, the LANDLORD will refund any excess operating expense funds
to the TENANT.
The actual operating expenses of each year, confirmed by the audit, will be
the basis for the estimate of operating costs for the subsequent year. These
expenses are not subject to any rental escalation.
C. The Parties agree that in exchange for the LANDLORD providing the
following improvements:
         1.                                  ; and
         2.                                  ;
the TENANT agrees to pay the total sum of $____ . This sum will be paid to
the LANDLORD over the life of the original Lease term in the amount of $


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per month/quarter in addition to and at the same time as the rent payment.
These payments are not subject to any rental escalation.
D. All financial obligations of the TENANT resulting from this Lease are
subject to the availability of funds appropriated annually by the Congress of
the United States of America.
ARTICLE SIX: WARRANTIES
A. The LANDLORD warrants that he/she/it is the sole and lawful owner of
the Premises and that he/she/it is duly authorized and able to enter into this
Lease and perform its obligations hereunder, and that this Lease and the
TENANT’s rights hereunder do not and will not conflict with any rights of
LANDLORD or any third party or governmental entity. The LANDLORD also
warrants that the TENANT shall peaceably enjoy possession of the Premises
for the Lease term (and any extensions thereof) without any interruption or
disturbance from the LANDLORD or any other person claiming by, from,
through, or under the LANDLORD or otherwise. The LANDLORD further
warrants that he/she/it will hold the TENANT free and harmless from any
and all demands, claims, actions or proceedings by any other party in regard
to the leased Premises.
B. The LANDLORD will handle and settle or otherwise dispose of all
demands, claims, actions, or proceedings by others in respect of the
TENANT’s right of quiet possession. If the TENANT has notified the
LANDLORD in writing of the demand, claim, action or proceeding, and the
LANDLORD has failed to take timely action to handle, settle or otherwise
dispose of such demand, claim, action or proceeding, then the TENANT may
defend its right to quiet possession, and the LANDLORD agrees to reimburse
the TENANT for any and all costs incurred thereby (including, without
limitation, all attorney’s fees and costs) as soon as practicable after the
TENANT’s presentation of its claim for such expenses.
C. The TENANT warrants that the person executing this Lease on its behalf
has all requisite power and authority to enter into this Lease on behalf of the
United States of America.
ARTICLE SEVEN: LANDLORD RIGHTS AND RESPONSIBILITIES
A. Right of Entry. For the purpose of maintaining the Premises, the
LANDLORD reserves the right to enter the Premises to inspect and make any
necessary repairs, so long as such entry is at prearranged times, with the
consent of the TENANT, and, at the TENANT’s discretion, in the presence of a
TENANT employee. The TENANT’s consent shall not be unreasonably
withheld. The LANDLORD may not, however, gain access to sensitive or
secured areas, as determined by the TENANT in its sole discretion.
B. LANDLORD-provided services. The LANDLORD shall furnish or otherwise
provide to the TENANT the following services during the Lease term:
________________. These services will be provided at no additional cost to


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the TENANT.
C. Maintenance Responsibilities. The LANDLORD shall, at his/her/its own
cost and expense, be responsible for all significant maintenance, structural
work, and repairs to the Premises, including, but not limited to, maintenance
and repair of structural elements and systems such as walls, ceilings, roofs,
floors, foundations, heat, ventilating and air-conditioning systems, elevators,
escalators, plumbing and related fixtures, LANDLORD-supplied generators,
water filtration systems, and fire protection systems. (As per Article 8(B),
the TENANT is only responsible for such minor maintenance as trash removal
and light bulb replacement, as required to fulfill its obligation to keep the
Premises in good repair and tenantable condition.) The LANDLORD
acknowledges that fulfillment of all of its obligations hereunder, including
keeping the building, its systems, and all common and external areas
thereof in good repair and tenantable condition, are essential to making the
Premises appropriate for use by the United States of America.
[If the Premises are within a multi-tenant unit, or bordered by sidewalks
and/or parking spaces, see instructions for additional language.]
D. Responsibility for Damages. The LANDLORD will be responsible for any
damages caused by the breakdown of any building systems or any failure to
maintain the common areas of the Premises. The LANDLORD accepts full
and sole responsibility for any claim arising in connection with damage or
injury sustained through the use of public entrances, stairways, elevators,
hallways and conveniences. The LANDLORD shall not be responsible for
interruptions in utilities, beyond LANDLORD’s control, supplied by municipal
sources.
E. Emergency Repairs. The LANDLORD agrees to commence, carry out, and
complete, at its sole expense, emergency repairs within 48 hours after
receiving oral or written notice from the TENANT of the need for repairs. For
repairs that cannot be completed within 48 hours, the LANDLORD agrees to
present a completion schedule for acceptance by the TENANT. For any
emergency repairs that the LANDLORD does not handle in this manner, the
TENANT may undertake the repair at the LANDLORD’s sole expense. Any
funds expended by the TENANT in this regard shall be deemed prepaid rent
toward the next rental payment and such rental payment shall be reduced
by the same amount. If all rental payments have been made, or the amount
expended exceeds the rental payment, the LANDLORD will make a direct
refund to the TENANT.
F. Taxes, Fees, and Assessments. The LANDLORD accepts full and sole
responsibility for the payment of all fees, taxes, levies, duties and other
charges of a public nature that are or may be assessed against the property,
including all use, ownership, and property taxes. Further, all expenses, if
any, incurred in connection with the execution or registration of this Lease,
including without limitation, notarial charges, registration charges,


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transaction taxes, stamp duties or other fiscal charges shall be paid by the
LANDLORD.
G. Registration. If local law permits the LANDLORD to register this Lease,
he/she/it warrants that he/she/it will do so at his/her/its sole expense, and,
if so required by the TENANT in writing, he/she/it will provide the TENANT
proof of registration within a reasonable time following the execution of this
Lease or extensions thereof.
H. Claims. The LANDLORD accepts full and sole responsibility for any claims
arising from the TENANT or from third parties for damage or injury sustained
when the LANDLORD has failed to maintain or repair the Premises or any
systems or common areas as required by this Lease. The LANDLORD also
accepts responsibility for damage or injury sustained by TENANT or third
parties and resulting from the negligence or willful acts of the LANDLORD,
LANDLORD’s agents, or employees.
ARTICLE EIGHT: TENANT RIGHTS AND RESPONSIBILITIES
A. The TENANT shall have the right, during the existence of this Lease, to
erect structures, additions and signs, to make alterations, and to attach
fixtures in or upon the Premises. This includes the right to affix a flagstaff, a
U.S. flag, a U.S. seal, and office signs and insignia on the Premises leased.
Such fixtures, additions, or structures placed in or upon or attached to the
said Premises shall be and remain the property of the TENANT and may be
removed before, at the time of, or within a reasonable time after the Lease
or any extension thereof expires or is terminated.
B. The TENANT shall, unless specified to the contrary, maintain the said
Premises in good repair and tenantable condition, including minor
maintenance such as trash removal and light bulb replacement, during the
continuance of this Lease, except for reasonable and ordinary wear and tear,
damage by the elements, or other circumstances not under the TENANT’s
control. Any damage arising from the intentional acts or negligence of the
LANDLORD, its agents or employees, or any other third parties not under
LANDLORD’s or TENANT’s control, is similarly excepted.
ARTICLE NINE: ASSIGNMENT AND SUBLEASE
A. The TENANT may at any time assign its interest in the Premises or any
portion thereof or sublet the Premises or any portion thereof to any party
without the prior consent of the LANDLORD.
B. If the LANDLORD intends to assign its rights and responsibilities under
the Lease to a third party, or if the LANDLORD intends to transfer its interest
in the property to a third party by any method, the LANDLORD shall give to
the TENANT written notice of the identity of such third party at least 90 days
before to the transfer or assignment. The TENANT agrees to keep this
information confidential until after the transfer is complete. The TENANT
may, within 90 days of receipt of the notice, terminate the Lease.


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ARTICLE TEN: PURCHASE OPTION
A. The LANDLORD hereby grants to the TENANT, in consideration of this
Lease and the rental rates agreed to above, a firm option to purchase, in fee
simple absolute and free of all encumbrances, the Premises covered by this
Lease, including land, improvements and all appurtenances. The entire
purchase price is ________.
B. The decision to exercise the option to purchase is at the sole discretion of
the TENANT, and shall not be construed to create any obligation by the
TENANT to purchase the property under any circumstances, or to create any
right in the LANDLORD to compel a sale.
C. This option to purchase shall continue open and in full force for the Lease
term and any renewals thereof. If and when the TENANT exercises the said
option to purchase, the LANDLORD covenants and agrees to convey to the
United States of America an unencumbered fee simple absolute title
(complete and perpetual ownership) to the Premises covered by this Lease,
including the land, improvements and all appurtenances, by deed with
covenant of warranty and covenant against encumbrances.
ARTICLE ELEVEN: INSURANCE
A. The LANDLORD shall bear responsibility for all risk of loss of or damage
to the Premises for the entire term of this Lease arising from any causes
whatsoever, other than TENANT fault, including but not limited to: fire;
lightning; storm; tempest; explosion; riot; civil commotion; malicious or
criminal acts of destruction; bursting or overflowing of water tanks,
apparatus or pipes, boiler or machinery; flood; labor disturbance;
earthquake; and any other casualty or Act of God.
B. The LANDLORD shall adequately insure the property against all risks
enumerated above and all risks normally covered under standard property
insurance. The LANDLORD shall also carry adequate personal injury and
liability insurance to cover all risks for which he/she/it is responsible
hereunder. Evidence of the LANDLORD’s insurance coverage shall be
furnished to the TENANT within 21 days after the parties sign the Lease, and
the TENANT reserves the right to ask in intervals thereafter for proof that
the policy remains in force; the TENANT may withhold rent until the
LANDLORD provides such proof.
C. Each party, respectively, shall be liable for damages to the leased
Premises caused by its own fault or negligence, or that of its agents or
employees.
ARTICLE TWELVE: DESTRUCTION OF PREMISES
A. Whenever the Premises or any essential part thereof shall be destroyed
or rendered unfit for further tenancy through fire, vandalism, earthquake,
flood, storm, war, civil disturbance, Act of God, or other similar casualty, this


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Lease shall, at the option of the TENANT, immediately terminate upon
provision of written notice to the LANDLORD. In the event of such
termination, no rent shall accrue to the LANDLORD after he/she/it receives
the TENANT’s written notice.
B. If the Lease is terminated, the LANDLORD shall within 45 days of
termination refund any advance rental payments in excess of rental liabilities
accrued to the date of termination.
C. In case of partial destruction or damage to the Premises from the above-
described causes, the TENANT may terminate this Lease only in part at its
option and remain in the portion of the Premises that remains tenantable.
Should the TENANT elect to remain in Premises rendered partially
untenantable, a proportionate rebate or reduction of prevailing rental
payments will be allowed and will be reflected in an amendment to this
Lease to be signed within 2 months after the damage occurs.
ARTICLE THIRTEEN: LANDLORD’s DEFAULT
In the event the LANDLORD fails to fulfill any of its obligations under this
Lease (―default‖), and where this Lease specifically provides no other
remedy for such failure, the TENANT is entitled either to terminate this
Lease, or, at its option, to take any measures which it deems necessary to
establish the conditions contemplated by this Lease at the entire expense of
the LANDLORD, including offsetting rental payments against any cost
incurred by the TENANT due to LANDLORD default. The TENANT will provide
written advance notice to the LANDLORD of its intention to take action in
accordance with this Article.
ARTICLE FOURTEEN: TERMINATION
A. The TENANT may, for its convenience, terminate this Lease in whole or in
part at any time, if it determines that such termination is in the best
interests of the TENANT, by giving written notice to the LANDLORD 30 days
in advance. If the TENANT terminates this Lease in accordance with this
clause, the TENANT shall not be liable for any charges additional to those
normally incurred up to the date the Lease is terminated.
B. The LANDLORD further agrees to make a pro rata refund of any rent
payments made for periods beyond the date the TENANT surrenders the
Premises in pursuance of any of the TENANT’s termination rights as
contained in this Lease.
ARTICLE FIFTEEN: DISPUTES RESOLUTION
A. In the event that any disputes arise concerning the text of this Lease, the
   English language version controls.
B. Any disputes arising between the Parties hereto concerning this Lease
   that cannot be resolved in negotiations between the LANDLORD and
   TENANT, shall be settled in accordance with the dispute settlement


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provisions that follow:
1.    This Lease is subject to the Contract Disputes Act of 1978, as
      amended (41 U.S.C. 7101 et seq.) (the ―Act‖). Except as provided
      in the Act, all disputes arising under or relating to this Lease shall
      be resolved exclusively under this Article; the Parties hereby waive
      any right they might have to bring suit in respect of any disputes or
      claims arising under or relating to this Lease.
2.    ―Claim,‖ as used in this Article, means a written demand or written
      assertion by the LANDLORD or TENANT seeking, as a matter of
      right, the payment of money in a sum certain, the adjustment or
      interpretation of the Lease terms, or other relief arising under or
      relating to this Lease. A ―claim arising under the Lease,‖ unlike a
      claim relating to the Lease, is a claim that can be resolved under an
      article of this Lease that provides for the relief sought by the
      claimant. However, a written demand or written assertion by the
      LANDLORD seeking the payment of money exceeding U.S.
      $100,000 is not a claim until certified as required by subparagraphs
      4(A) through 4(D) of this Article. A voucher, invoice, or other
      routine request for payment that is not in dispute when submitted
      is not a claim under this Act. The submission may be converted to
      a claim under the Act, by complying with the submission and
      certification requirements of this Article, if it is disputed either as to
      liability or amount or is not acted upon within a reasonable time.
3.    A claim by the LANDLORD shall be made in writing and submitted
      within 6 years after accrual of the claim to the TENANT’s
      Contracting Officer for a written decision. A claim by the TENANT
      against the LANDLORD shall be subject to a written decision by the
      TENANT’s Contracting Officer.
4.    (A)    The LANDLORD shall provide the certification specified in
             subparagraph 4(C) of this Article when submitting any claim
             exceeding U.S. $100,000; or regardless of the amount
             claimed, when using Arbitration conducted pursuant to 5
             U.S.C. 575-580 or any other alternative means of dispute
             resolution (―ADR‖) technique that the TENANT elects to
             handle in accordance with the Administrative Dispute
             Resolution Act (―ADRA‖) (5 U.S.C. 571 et seq).
      (B)    The certification requirement does not apply to issues in
             controversy that have not been submitted as all or part of a
             claim.
      (C)    The certification shall state as follows: ―I certify that the
             claim is made in good faith; that the supporting data are
             accurate and complete to the best of my knowledge and



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            belief; that the amount requested accurately reflects the
            Lease adjustment for which the LANDLORD believes the
            TENANT is liable; and that I am duly authorized to certify the
            claim on behalf of the LANDLORD.‖
     (D)    The certification may be executed by any person duly
            authorized to bind the LANDLORD with respect to the claim.
5.   For LANDLORD claims of U.S. $100,000 or less, the TENANT’s
     Contracting Officer must, if requested in writing by the LANDLORD,
     render a decision within 60 days of the request. For LANDLORD-
     certified claims over U.S. $100,000, the TENANT’s Contracting
     Officer must, within 60 days, decide the claim or notify the
     LANDLORD of the date by which the decision will be made.
6.   The TENANT’s Contracting Officer’s decision shall be final unless the
     LANDLORD appeals or files a suit as provided in the Act.
7.   If the claim by the LANDLORD is submitted to the TENANT’s
     Contracting Officer or a claim by the TENANT is presented to the
     LANDLORD, the Parties, by mutual consent, may agree to use
     Alternate Dispute Resolution (ADR). If the LANDLORD refuses an
     offer for Alternate Dispute Resolution, the LANDLORD shall inform
     the TENANT’s Contracting Officer, in writing, of the LANDLORD’s
     specific reasons for rejecting the request. When using arbitration is
     conducted pursuant to 5 U.S.C. 575-580, or when using any other
     ADR technique that the agency elects to handle in accordance with
     the ADRA, any claim, regardless of amount, shall be accompanied
     by the certification described in subparagraph 4(C) of this Article,
     and executed in accordance with subparagraph 4(D) of this Article.
8.   The TENANT shall pay interest on the amount found due and unpaid
     from:
     (A)    The date the TENANT’s Contracting Officer receives the claim
            (certified if required); or
     (B)    The date that payment otherwise would be due, if that date is
            later, until the date of payment. With regard to claims having
            defective certifications, as defined in (FAR) 48 CFR 33.201,
            interest shall be paid from the date that the TENANT’s
            Contracting Officer initially receives the claim. Simple
            interest on claims shall be paid at the rate, as fixed by the
            U.S. Secretary of the Treasury as provided in the Act, which is
            applicable to the period during which the TENANT’s
            Contracting Officer receives the claim, and then at the rate
            applicable for each 6-month period as fixed by the U.S.
            Secretary of the Treasury during the pendency of the claim.
9.   The LANDLORD shall proceed diligently with performance of this


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         Lease, pending final resolution of any request for relief, claim,
         appeal, or action arising under or relating to the Lease, and comply
         with any decision from the TENANT’s Contracting Officer.
   10.   In the event that both Parties have complied fully with all the
         provisions of this Article, but one of the Parties is dissatisfied with
         the final decision, the aggrieved Party may, at its option, either
         appeal the decision to the U.S. Civilian Board of Contract Appeals,
         or file a suit in the U.S. Court of Federal Claims.
ARTICLE SIXTEEN: CHOICE OF LAW
The terms of this Lease shall be construed in accordance with the local laws
governing the situs of the Premises leased hereunder.
ARTICLE SEVENTEEN: SCOPE OF AGREEMENT AND LEGAL
CONSTRUCTION
A. This Lease cancels all other agreements that the Parties may have
   previously entered into which relate to the Premises, and this written
   agreement constitutes the entire understanding of the Parties.
B. Oral discussions and representations made during negotiation of this
   Lease shall not be construed to be terms of this Lease.
C. Any changes, additions, variations, or modifications of the terms of this
   Lease shall not be valid unless made in writing and signed by both Parties
   hereto. For the purposes of this paragraph, only the signature of the
   (Principal Officer, General Services Officer, Management Officer, USAID
   EXO, or Mission Director) at the U.S.Embassy/USAID Mission in
   ______________ shall be deemed valid and binding as against the
   TENANT.
D. Neither failure of either Party to insist upon strict performance of any
   agreement, term, covenant, or condition hereof, nor failure of either Party
   to exercise any right or remedy consequent upon a breach thereof, shall
   constitute a waiver of any breach or a waiver of such agreement, term,
   covenant, or condition in the future.
E. An invalidation of one of the clauses of this Lease agreement shall not be
   grounds for invalidation of any other clauses.
ARTICLE EIGHTEEN: NOTICES
A. All notices under this Lease agreement, other than legal service of
   process, shall be delivered to the persons at the addresses set forth
   below:
For the LANDLORD:        For the TENANT:
________________         ________________
         Address         (Title, i.e., General Services Officer,


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                         Management Officer, Executive
                         Officer, Mission Director) at U.S.
                         Embassy/Consulate General/
                         Consulate/USAID Mission
                         Address
B. Legal service of process upon the TENANT shall be made through the
   Ministry of Foreign Affairs in accordance with customary international law.
ARTICLE NINETEEN: CERTIFICATION AND DISCLOSURE REGARDING
PAYMENTS TO INFLUENCE CERTAIN FEDERAL TRANSACTIONS
(A) The LANDLORD, by signing this Lease, hereby certifies to the best of
   his/her/its knowledge and belief that on or after December 23, 1989:
   (1)   No appropriated funds of the United States Government have been
         paid or will be paid to any person for influencing or attempting to
         influence an officer or employee of any agency of the United States
         Government, a member of the United States Congress, an officer or
         employee of the United States Congress, or an employee of a
         Member of the United States Congress on the LANDLORD’s behalf,
         in connection with the award of any United States Government
         contract (including this Lease), the making of any United States
         Government loan, the entering into of any cooperative agreement,
         and the extension, continuation, renewal, amendment, or
         modification of any such contract, grant, loan, or cooperative
         agreement.
   (2)   If any funds other than United States Government appropriated
         funds (including profit or fee received under a covered Federal
         transaction) have been paid, or will be paid, to any person for
         influencing or attempting to influence an officer or employee of any
         agency of the United States Government, a member of the United
         States Congress, an officer or employee of the United States
         Congress, or an employee of a Member of the United States
         Congress, on the LANDLORD’s behalf in connection with this Lease,
         the LANDLORD shall complete and submit to the Contracting
         Officer, prior to the execution of this Lease, OMB Standard Form
         LLL, Disclosure of Lobbying Activities.
   (3)   The LANDLORD will include the language of this certification in any
         contract awarded by LANDLORD to fulfill LANDLORD’s obligations
         under this Lease that exceeds U.S. $100,000, and will require that
         all recipients of such contract awards shall certify and disclose
         accordingly.
(B)   Submission of this certification and disclosure is a prerequisite for



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  making and entering into this Lease imposed by Section 1352, Title 31,
  United States Code. Any person who makes an expenditure prohibited
  under this provision or who fails to file or amend the disclosure form to be
  filed or amended by this provision, shall be subject to a civil penalty of
  not less than U.S. $10,000, and not more than U.S. $100,000, for each
  such failure.
SIGNATURES
IN WITNESS WHEREOF, the Parties have affixed their signatures this
______day of ________________, 20__.
LANDLORD:           TENANT:
       (Typed Name)     United States of America
By ________________                By ________________
(Typed Name)                        (Typed Name)
               (Title, i.e., General Services Officer,
               Management Officer, Executive Officer,
                 Mission Director) at U.S. Embassy/
                 Consulate General/Consulate/USAID
                 Mission




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                       15 FAM EXHIBIT 342
                       LEASE AMENDMENT
                           (CT:OBO-29;      03-29-2012)
       (Amend, as appropriate, for use with USAID leases.)
Amendment No. _________to
Lease No.
Date
Post
PropID
(1)       Reference is made to Lease Number ___________ entered
into on (Date) , (Year)_ between          (Name of LANDLORD) __ ,
LANDLORD, and the United States of America, acting by         (Name and
Title of Officer)     , TENANT, for          (Type of Space) _______ at
(Address)                              , and amendments to such Lease if
any.
(2)      In consideration of the LANDLORD providing _______ square feet of
additional space, the TENANT hereby agrees to pay additional rent in the
amount of __________(quarterly, annually) commencing on (Date),
(Year).
(or)
The LANDLORD hereby grants permission to the TENANT to install (air-
conditioning, grill bars, shelving, kitchen sink, sanitary facilities, etc.) in the
above-mentioned Premises, such installations to remain the property of the
TENANT, subject to removal upon termination of the said Lease without
obligation to restore the Premises to original condition.
(or)
Article  of said Lease is hereby amended to provide for maintenance of the
Premises by the TENANT for which the rent shall be reduced to
___________ annually, effective (Date),
 (Year).
(or)
Whereas, Article _______ of said Lease now reads ―
          _______________,‖ it is deemed in the best interest of both Parties
that it be changed to read ―       _______________________‖ as of the
date of signing this Agreement.
(3)      Therefore, it is agreed by and between the LANDLORD and the
TENANT that the referenced Lease is hereby amended as indicated in (2)
above, all other provisions of the said Lease remaining the same and


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unchanged.
In witness thereof, the Parties have hereunto subscribed their names this
         __day of (Month), (Year).
The United States of America, Acting By:
 (Name and Title)                     TENANT
 (Name, Title, and Address)           LANDLORD




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              15 FAM EXHIBIT 344
         TERMINATION AND ACQUITTANCE
                  AGREEMENT
                          (CT:OBO-29;      03-29-2012)
  Date
  Post
  Lease No.
  PropID
(1)      Reference is hereby made to Lease number ____________ dated
(Date), (Year) and Amendments, between (Name of LANDLORD) ___ as
LANDLORD and the United States of America as TENANT, providing for the
Lease of the following described Premises:
(Brief description of Premises with street address)
(2)      The Lease on the above Premises is considered cancelled and
terminated effective (Date), and the LANDLORD hereby acknowledges that
the Premises (and furnishings) were returned by the TENANT to the
LANDLORD on (Date) __, in a condition acceptable to the LANDLORD, free of
any and all claims against the United States Government or any agency,
agent, or employee thereof.
(3)      In witness thereof both the Parties have hereunto signed as of the
date given below:
DATED AT        (Post)       this       day of     (Month)    ,   (Year).
The United States of America, Acting By:
 (Name and Title)                                    TENANT
 (Name, Title, and Address)                          LANDLORD




                                                             15 FAM 340 Page 37 of 37

				
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